Development impact as a yardstick
What we achieve in developing and emerging-market countries by providing long-term finance and advising businesses is DEG’s key yardstick. For many years we have supported sustainable development as defined by the 2030 Agenda of the United Nations with its 17 Sustainable Development Goals (SDGs). The principle of sustainability is embedded in DEG’s business strategy, applying to dealings with customers and partners as well as the way it runs its own business.
With our commitment we are actively working to establish and disseminate international environmental, social and corporate governance standards in developing countries. That includes carrying out painstaking environmental and social reviews and closely tracking the implementation of any action plans contractually agreed by the businesses. This task is undertaken by a team of DEG’s own experienced specialists, supported by outside experts.
Taken as the benchmark here are the IFC Performance Standards – the international standard for the private sector –, the World Bank Group’s Environmental, Health and Safety Guidelines, and the conventions issued by the International Labour Organization (ILO). A list of exclusions defines the areas in which DEG does not become involved on principle. We have also made a commitment to actively respect and safeguard human rights in the course of our business operations.
“A lot of companies appreciate that it is important for them to aim at transformation and adopt even more sustainable business practices, also from an economic viewpoint. This makes it necessary to anticipate opportunities as well as risks, and to adapt business models. We provide specific advice to our customers in this respect.”
Martin Geiger Head of Department for Sustainability and Corporate Governance at DEG
Many companies are now aware that sustainable business operations are also economically worthwhile. For example, consistently gearing working processes towards saving energy and protecting the environment also helps businesses reduce their costs and raise profitability. Through our Business Support Services (BSS), we can systematically help enterprises design their processes to be sustainable and further boost their business performance.
Sustainable management also includes working hard to make our investments as climate-neutral as possible. For this reason, DEG has long avoided financing coal-fired power stations. Our goal is to make the DEG portfolio climate-neutral by 2040.
As a sustainability-oriented provider of development financing, we also consider it important to offer comprehensive information on our activities wherever possible. In addition to regularly updated information and annual reports such as DEG’s financial statements and the development policy report, we have published information since 2015 on every new financing commitment, giving details of the co-financed investment. This includes details of the co-financed company and the investment, the amount of credit, and the environmental and social category.
The sustainability-related developments and services provided by DEG are also included in the Sustainability Report published by KfW Group.
KfW – the transformative promotional bank
As part of KfW Group, we are also part of the tranSForm strategic programme. KfW is committed to promoting the transition to a more climate-friendly economy with appropriate technologies, and ensuring that this transformation is implemented in a socially acceptable way. The core frames of reference in this respect are the SDGs and the Paris Climate Agreement. Through tranSForm, “KfW Roadmap Sustainable Finance” findings have been developed and put into operation since 2021. All business areas and subsidiaries of KfW participate in this.